Social Security wrongly declares 14,000 people dead each year

Laura Brooks discovered she had been mistakenly declared dead when she stopped receiving her disability checks, and her rent and student loan payments unexpectedly bounced.

NEW YORK (CNNMoney) -- More Americans are being erroneously killed off by the Social Security Administration every day.

Of the approximately 2.8 million death reports the Social Security Administration receives per year, about 14,000 -- or one in every 200 deaths -- are incorrectly entered into its Death Master File, which contains the Social Security numbers, names, birth dates, death dates, zip codes and last-known residences of more than 87 million deceased Americans. That averages out to 38 life-altering mistakes a day.

While these errors occur online, in the depths of the administration's database, they have a very real impact on the people who have effectively been declared dead.

"Erroneous death entries can lead to benefit termination, cause severe financial hardship and distress to affected individuals, and result in the publication of living individuals' [personal identifying information] in the [Death Master File]," the Inspector General said in its most recent evaluation of the database.

Laura Brooks, of Spotsylvania, Va., discovered she had been declared dead when she stopped receiving her disability checks, and her rent and student loan payments unexpectedly bounced.

She went to her bank and a representative said her account had been closed because she was dead. Brooks, a 52-year old mother of two, was already on permanent disability because of a severe depressive disorder, so hearing this turned her already difficult world completely upside down.

"It was one of those surreal things, like seeing a UFO," said Brooks. "When you are a person who already thought that maybe you should be dead because life was so bad to you, I thought this could be a premonition."

The bank representative told Brooks she couldn't reopen her account until she could prove she was alive. When she went to the Social Security office in January 2001, she found out she was declared dead on Dec. 6, 2000. To correct this, she had to submit the pay stubs she was receiving from a program that helps people on disability get back to work.

It took two months for the Social Security Administration to finally "revive" her. The administration later explained that a funeral director had mistyped a Social Security number when submitting a death notice to the agency.

Because of that misstep, Brooks said she accumulated between $300 and $400 in fees for bounced checks, and she hadn't received the more than $1,000 in disability payments she was owed. Once she was declared alive again, the Social Security Administration only resumed her payments -- it wouldn't reimburse her for missed payments, she said.

"Those disability checks were everything I had, and the $300 to $400 I had to pay in fees was more than half of that weekly income," she said. "But more than the financial impact of all of this was the psychological shock -- it spiraled me into further depression and really started me on the road to questioning authority."

Making matters worse, Brooks said the Social Security Administration had somehow lost the file containing all of her information, including her disability benefit records and medical history. It took her two years to rebuild it.

Eleven years after being declared dead by the Social Security Administration, Brooks claims the agency has yet to apologize to her for the debacle.

The Social Security Administration said it cannot comment on specific cases but said it works as quickly as it can to fix these types of mistakes and that two months is too long for an error like this to be resolved.

36,657 erroneous deaths in three years

Of course, Brooks isn't the only living person to have been put in the Social Security graveyard. In a recent investigation, the Social Security Office of the Inspector General, which oversees the Social Security Administration, discovered that the Death Master File contained 36,657 death entries between May 2007 and April 2010 for people who were very much alive.

In fact, the Social Security Administration admits that erroneous entries slip through the cracks.

"It is unfortunate, but some of the death data that we post to our records ... proves to be wrong and we correct it as soon as possible," said administration spokesman Mark Hinkle. "Usually the error was inadvertently caused because of a human typing error when death information was entered into a computer system."

This inaccurate information is then sold to the public, as well as to banks and credit bureaus.

Those who are declared dead not only lose their ability to apply for credit or receive benefits, but they are also at a high risk for identity theft now that all of their personally-identifying information has been made public.

In one review, the Inspector General found that months after the Social Security Administration deleted incorrect information from the database, the personally identifiable information of 28% of the individuals was still publicly available on at least one other web site.

What to do if you've been declared dead

To avoid the financial hardship or risk of identity theft as a result of being named to the Social Security's death list, the Identity Theft Resource Center recommends that you do the following:

First, find out who reported you as dead.

Then, get a copy of your death certificate from the county clerk's or recorder's office where the death was reported, and fill out a form to amend the certificate. The death certificate will include the name of whoever reported your death. This person is typically contacted to sign the amendment as well.

To remove your name from the database, you need to make an appointment at your local Social Security office. Bring a photo ID and the certified copy of the amended death certificate, the ITRC said.

Once you correct the information with Social Security, you may need to contact your bank, credit bureaus and any other entities that are under the impression that you're deceased to let them know you've been born again.

Social Security's Hinkle said it's typically easier to fix than this.

"It normally involves seeing the person face-to-face and verifying some form of current ID," he said, adding that the administration occasionally writes letters that people can present to other entities to prove they are alive.

"We take these situations seriously and wish they didn't happen at all, but when we find out it has occurred, we help the person fix it," said Hinkle.